If there is one thing investors love as much as cannabis stocks, it’s lithium stocks — such as Ion Energy (OTC:IONGF | TSX.V:IONOTC:IONGF | TSX.V:ION), a new exploration company seeking to capitalize on China’s limitless demand for lithium carbonate.
Ion Energy’s appeal is obvious: Led by a team of mining industry experts, the Canadian company holds a 100% interest in two enormous lithium brine projects in Mongolia totaling 247,000 acres and located just 15 miles from China’s northern border.
The location is crucial. China now manufactures a whopping 70%3 of the lithium batteries needed to power electric vehicles, and its rapidly developing EV market is already three times the size of that of Europe or the United States.
And although China is the world’s second largest4 producer of raw lithium, the impurity levels found in many of China’s lithium sources are too high for them to be used in long-life batteries, such as those used in EVs.
As a result, in 2021 the price for lithium has skyrocketed 68% to $11,250 a metric ton, according to Benchmark Mineral Intelligence.5
Industry analysts predict demand for lithium will explode over the coming years, increasing 650% by 2027.6
Positioned to Supply the World’s #1 Producer of Lithium-Ion Batteries
This means Ion Energy’s properties in Mongolia are uniquely positioned to supply China’s exploding EV and battery markets – as well as the large tech industries of Korea, Taiwan, and Japan.
For their part, investors are hoping it’s déjà vu all over again.
During the first electric vehicle boom in lithium, from 2016 to 2018, many lithium stocks saw eye-popping gains.
Lithium Americas Corp (LAC) jumped from $1.17 a share in January 2016 to $10.22 two years later, a nearly 8-fold7 return (795%) in just 24 months.
Millennial Lithium Corp (MLNLF) soared 554%8 from June 2016 to November 2017. Wealth Minerals Ltd (WMLLF) climbed 845%9 in the first ten months of 2016, while Mgx Minerals (MGXMF) rose 1,399%10 in 60 days in late 2016.
Now, thanks to the Biden Administration’s $2.3 trillion11 infrastructure plan and a new push for renewable energy worldwide, the electric vehicle market is red hot right now.
Volkswagen sold more electric cars worldwide at the end of last year than Tesla.12 Mercedes just released its first first-class, all-electric sedan.13
GM will spend $27 billion on all-electric and autonomous vehicles through 2025 – and many manufacturers, such as Volvo, are now predicting that they will be fully electric by 2030.14
As a result, lithium exploration companies such as Ion Energy (OTC:IONGF | TSX.V:IONOTC:IONGF | TSX.V:ION) are rushing to capitalize on a growing shortfall in supplies of high-quality lithium – and the skyrocketing boom in electric vehicles.
China’s Red Hot Battery Market Desperate for High-Quality Lithium
Lithium is actually one of the most common elements on earth. A highly reactive alkali metal, it’s an essential component for the batteries used in electric vehicles, both the NMC (nickel manganese cobalt) batteries used in North America and in Europe and the LFP (lithium phosphate) batteries favored in Asia.
With its two enormous lithium brine projects in Mongolia totaling over 247,000 acres, Ion Energy (OTC:IONGF | TSX.V:IONOTC:IONGF | TSX.V:ION) could be uniquely positioned to supply the largest EV battery markets in the world: China, Korea, Taiwan, and Japan.
Initial tests indicate the largest of the two properties, dubbed Baavhai Uul, contains significant levels of lithium, with an average grade of 426 ppm and a maximum grade of 811 ppm.
What’s more, both properties are made up of lithium-rich brine aquifers (underground rivers) just 20 meters below the surface, a significant advantage in terms of production costs.
Untapped and Unlimited Potential for Mongolian Lithium
Little-known but mineral-rich Mongolia represents a ground-floor opportunity for lithium investors.
Roughly the size of Alaska15, the country is located between China and Russia on China’s northern border.
Mongolia’s position allows it to supply two of the world’s largest countries directly, China and Russia, with its mining industry contributing 20% of the nation’s entire domestic output and up to 90% of its exports.16
The country also has a year-round operating environment with a highly skilled in-country labor force.
And with China now controlling 101 of the world’s 136 lithium battery manufacturing plants17, Ion Energy (OTC:IONGF | TSX.V:IONOTC:IONGF | TSX.V:ION) Mongolian properties could give it an unparalleled strategic advantage over lithium exploration companies in Latin America, Australia or the U.S.
Lithium Market Poised to Explode with Renewable Energy Push
Light electric vehicle sales were growing at an annual rate of 28% in the European Union, 46% in the United States and an eye-popping 69% in China, before a temporary slow-down due to the coronavirus.18
And with the election of Joe Biden as president in the U.S. and his push to transition the U.S. economy “away from the oil industry”19 and toward an all-electric future, experts believe the EV market will grow at an even faster rate going forward.20
In March, a number of U.S. senators called for a ban on new sales of gasoline-powered cars anywhere in the United States by 203521 – and industry analysts predict that sales of electric vehicles in the U.S. could grow from 3% of all vehicles today to 50% by 2035.22
As a result, the lithium-ion battery market is expected to grow at a compound annual growth rate of 16.5%,23 reaching $92 billion by 2024.
Experience Turning Mongolia Mining Startups into HUGE Winners
Chief Executive Officer Ali Haji and Chairman Matthew Wood both have more than a dozen years’ experience as mining industry executives with proven track records in the mining development space.
Wood’s first foray into Mongolia was in a coal exploration project, Hunnu Coal, in which he raised $15.224 million in start-up capital and then sold the company for $500 million. Haji, a director of Antler Hill Mining Ltd, then joined Wood in launching Steppe Gold in 2016, a precious metals explorer, and now producer, focused on Mongolia. Steppe Gold has seen its share price soar 254%25 in the past three years.
Wood and Haji are joined by two Mongolian citizens, Bataa Tumur-Ochir and Enkhtuvshin Khishigsuren, both with decades’ experience in the Mongolian mining industry, as company directors.
Tumur-Ochir serves as an advisor to the Mongolia Ministry of Mining and Heavy Industry, and Khishigsuren has worked for 30 years for various multinational mining companies and is credited with having discovered several prospective gold, molybdenum and copper deposits in Mongolia, including the Olon-Ovoot multi-million ounce gold deposit.
Rounding out the team is John McVicar as chief financial officer, and another mining industry veteran, Aneel Waraich, as director. Waraich also serves as an executive vice president and director of Steppe Gold.26
Betting on the Future of Electric Vehicles
It goes without saying that many investors look at lithium exploration stocks as highly speculative.
Currently selling for less than $1.00 per share, it has the distinction of having the first lithium brine license ever granted in Mongolia, with 100% interest in two enormous properties of more than 247,000 acres.
Plus, the company is fully funded for the next two years. Enough capital to complete its exploration program to prove the quality of the lithium already identified on the properties and acquire additional lithium bearing licenses in country.
Hands-On, Insider Knowledge of the Mongolia Mining Sector
The company’s management team knows the Mongolian mining industry from the inside out — with a former Mongolian government official serving as a director — and has a proven track record of taking companies from tiny start-ups to hugely profitable takeover targets.
Do your due diligence. But then consider adding Ion Energy (OTC:IONGF | TSX.V:IONOTC:IONGF | TSX.V:ION) to your speculative portfolio. If geophysical and drilling tests confirm the lithium quality previously discovered, this is a stock that could see substantial price appreciation very quickly.
With China now producing 70% of all the lithium-ion batteries in the world and electric vehicles now being virtually mandated in many countries, China’s need for lithium carbonate can only go up.
And a company such as Ion Energy, exploring lithium-rich properties just 15 miles from China’s northern border, could end up writing its own ticket.
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FORWARD LOOKING INFORMATION
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